BUS 445 WEEK 2 Voice of the Customer

QUALITY IN PRACTICE 	UNDERSTANDING THE VOICE OF THE CUSTOMER AT LAROSA’S PIZZERIAS70

All business is the same, it just looks different is a favorite quote of T. D. Hughes CEO of LaRosa-, Inc. LaRosa- is a privately held chain of neighborhood pizzerias with 54 locations in Cincinnati, Ohio, northern Kentucky, and southeast Indiana, that offers full-service dine-in, carryout, and home delivery. LaRosa- competes against such national chains as Pizza Hut, Papa John-, Uno-, and other local restaurants, yet holds a 45 to 50 percent share in its market area. LaRosa- has been a leader among local businesses in adopting and promoting total quality principles. Hughes’ quote provides a foundation for learning from other organizations and adopting high-performance practices that have proven successful, no matter what business they come from. One of these is the Voice of the Customer process.

In 1997, as part of a new strategic planning process, LaRosa- identified growth as a key strategic goal. Because the local market was essentially saturated, however, the executive management team worked on strategies for growing the company for three years and produced no tangible results. One of the reasons for the impasse was the lack of sound, factual data. The executive management team had developed three growth strategies, but could not agree on which one to follow because of a lack of a fact-based foundation for the decision.

In 2000, a project team was formed to tackle this issue, and was given complete latitude to make any recommendation for an Italian/pizzeria concept based on customer needs and expectations. The team consisted of the marketing director (team leader), two executive vice presidents, the director of operations, two franchise owners, an external strategic business partner, and the CEO, who was the team sponsor. The key tool that successfully led to an understanding of their customers and to a new and innovative restaurant design was Voice of the Customer (VOC). VOC is a structured methodology for listening to customers that is promoted by the Center for Quality of Management (CQM), an industrial consortium based in Boston (http://www.cqm.org). The basis for VOC is asking customers to express their needs and expectations through their experiences. LaRosa- completed 16 in-depth, one-on-one interviews with current and potential customers both inside and outside of their current market area to provide examples of dining incidents these individuals had experienced, seeking “the good, the bad, and the ugly.” Here are some responses from customers of current competitors and potential competitors in other markets.

1.	“So there I was, like herded cattle, standing on the hard concrete floor, cold wind blasting my ankles every time the door opened, waiting and waiting for our name to be called.”

2.	“And then I saw a dirty rag being slopped around a dirty table!”

3.	“The manager said, ‘That- not a gnat, that- black pepper,’ so I said I know the difference between black pepper and a gnat, black pepper doesn’t have little wings on it!”

4.	“When they’re that age, going to the bathroom is a full-contact sport—they’re reaching and grabbing at everything, and you’re trying to keep them from touching anything because the bathroom is so dirty.”

What were the customers actually saying? One of the challenges that LaRosa- faced was to translate the “customer voices” into actionable terms. In these examples, LaRosa- understood the customers as saying that restaurant design should consider the diverse comfort needs of all guests, that it provide a facility that customers implicitly trust, that customers feel cared for by service staff, and that restroom cleanliness affirms guests’ trust in restaurant cleanliness. In analyzing all the responses gathered, LaRosa- was able to prioritize the most important customer requirements: (1) assurance that the kitchen is clean (which is reflected by the cleanliness of the restrooms), (2) prompt service, (3) food and drinks at their proper temperature, (4) fresh food, (5) meeting the unique needs of adult guests as well as families, (6) exceeding service expectations, (7) an easy to read and understand menu, and (8) caring staff.

The experience of using VOC changed the company focus from a “product-out” to a “market in” mentality. It gave them a decision-making tool based on factual data and broke down communication silos within the company, and eliminated the age-old sales and marketing versus operations conflict. The executive management team and directors were able to agree on a growth strategy that had eluded them for three years. The result was a new restaurant design concept that explicitly addressed the voice of the customer. To meet the diverse needs of customers, for example, LaRosa- developed a larger waiting area, a casual bar area with more of an adult atmosphere in addition to the family dining areas, both table and booth seating, and a private dining area for parties. LaRosa- also initiated an improved kids’ program highlighted by Luigi- Closet, a small area in which children can select a toy or activity to keep them busy and crackers to eat while waiting for dinner. The Chapter 5 Bonus Materials folder on the Premium website includes a PowerPoint presentation of LaRosa- Restaurant Design.

  BONUS MATERIALS

The new restaurant jumped to second in sales behind LaRosa- flagship location. The dining room check average is 25 percent higher than the market average, profitability as a percent of gross sales is well above the chain average, and secret shopper satisfaction results show that it is performing at the top of the chain.

Key Issues for Discussion

1.	How does VOC differ from other forms of market research into customer needs and expectations? What advantages and possible disadvantages does it have?

2.	What impact did the VOC process have for LaRosa-?

3.	Conduct a mock VOC for your school or college. What did you learn? (Evans 227-228)

Evans,  Lindsay. Managing for Quality and Performance Excellence, 8th Edition. Cengage Learning, 01/2010. VitalBook file.

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